Navigate:

Consumer Financial Protection Bureau gets a visit from Obama

'I thought I would just drop by to help your new director move in,' Obama said. | AP Photo

Led by Minority Leader Mitch McConnell, GOP senators had blocked Cordray’s confirmation while trying to force changes in the CFPB, and used the pro forma sessions to stymie Obama’s recess appointment powers to give him the job. Obama trumped that strategy by declaring that the Senate wasn’t conducting business, didn’t have a quorum and therefore was on recess.

The White House insists Obama stands on solid legal ground, and got input from top lawyers in the Justice Department and the Office of Legal Counsel before making the move. But administration officials won’t say whether those lawyers wrote opinions or memos that spelled out their rationale — paperwork that they might be compelled to make public under freedom of information rules.

Text Size

-

+

reset

Just hours after Obama appointed Cordray to great fanfare Wednesday, an irate Grassley blasted the president for sweeping aside Senate tradition on the appointment and demanded to know about the White House’s deliberations. On Friday, he and several other leading Republican senators — including Jon Kyl of Arizona, Tom Coburn of Oklahoma, Utah’s Orrin Hatch and Jeff Sessions of Alabama — followed up with a letter to Attorney General Eric Holder, asking for specifics, including whether the Justice Department formally consulted with the president, and insisting he hand over any written analysis.

The administration, they wrote, “owe[s] it to the American people to provide a clear understanding of the process that transpired and the rationale it used to circumvent the checks and balances promised by the Constitution,” Grassley said in a statement Friday, alluding to a Prohibition-era Justice Department opinion which described a congressional recess of inactivity stretching more than a few days. “Overturning 90 years of historical precedent is a major shift in policy that should not be done in a legal opinion made behind closed doors hidden from public scrutiny.”

David Addington, former chief of staff to Vice President Dick Cheney, said it’s “odd” for the Obama admistration to refuse to say whether there are legal opinions or memos framing the president’s decision to move ahead with Cordray.

“From the point of view of accountable government, … I think that’s a reasonable inquiry,” said Addington, now a Heritage vice president for domestic and economic policy. “I’m not saying whatever legal opinion the Justice Department renders, the president is bound to follow it. … He’s entitled not to observe what the attorney general said, but that’d be pretty sporty.”

Unless the legal analysis touches on classified information, “in my opinion, they all ought to be published,” he said. “There is a presumption in America against secret law.”

Obama made no mention of the controversy at the CFPB, however, where he was greeted like a conquering hero with cheers and applause.

The president praised Cordray and his staff for launching the bureau from scratch, gave a “shout-out” to Elizabeth Warren — the consumer advocate and Harvard law professor-turned-Massachusetts Senate candidate who came up with the idea — and said he’s ready to join them in fighting greedy banks and shady lenders. The director and his team, he said, are engaged in important work that can move forward now, and he congratulated them for “serving your country” as its top financial services watchdog.

“Now that Richard is your director, you can finally exercise the full power that this agency has been given to protect consumers under the law,” the president said. “Now that he’s here, irresponsible debt collectors and payday lenders and independent mortgage servicers and loan providers, they’re all bound by the same rules as everybody else. No longer are consumers left alone to face the risk of unfair or deceptive or abusive practices — not anymore.”

Readers' Comments (79)

As he should. The GOP is reeling right now. all their efforts to destroy America are going down the crapper. Along with their chances to win in 2012. Maybe the GOP should just let Obama have this next election and start work on repairing their disasterous image and getting viable candidates ready for 2016. This bunch they have running now are going to set back the party even more.

President Obama’s executive power-grab this week — making four “recess” appointments when the Senate isn’t in recess — is a mark not of his strength, but of his relative weakness. He is asserting an authority he does not possess through the Constitution because he has precious little personal authority left to assert.

He had it and he lost it, and he can’t figure out how to get it back — so he’s just going to take it.

“When Congress refuses to act, and as a result hurts our economy and puts people at risk, I have an obligation as president to do what I can without them,” Obama said Wednesday as he trumpeted his installation of Richard Cordray as head of his new consumer-activism bureau.

This is rhetoric designed to thrill liberals and Democrats, who (like all partisans and ideologues) love what they take to be the “good fight,” and don’t particularly care how it’s waged. That’s true even if they spent eight years screaming about supposed unconstitutional actions on the part of the Bush administration, every one of which had a far firmer foundation in constitutional law than Obama’s unprecedented action this week.

They also love it because they think it represents an awakening by Obama to the nature of the obstructionist efforts against him (and a winning re-election strategy) when he says he’ll do “what I can” to combat Washington’s brokenness.

This supposedly a) acknowledges the public sentiment against the city whose most powerful resident he is, b) alleges he’s not the reason for the problems and c) places the blame on the recalcitrant Congress.

Maybe it’s the best hand Obama has to play, but it’s not a very good hand. For one thing, the voters who have turned on him don’t think he has exercised too little power, but rather too much — so bragging about doing things without congressional sanction may not play well.

Second, no matter how resolute he sounds, the fact that he has to act in a somewhat rogue manner is an expression of a profound loss of presidential authority — and one that he can’t successfully blame on Congress.

Obama lost his ability to push his agenda through Congress when he received what he himself called a “shellacking” in the November 2010 elections. That shellacking was primarily the result of massive policy overreach when he had a Democratic Congress in his pocket.

He spent 2009 and 2010 getting what he wanted: a trillion dollar stimulus. Auto-industry nationalization. And, of course, his health-care law. It was a wildly successful first 18 months — and it led directly to the bruising defeat he suffered as soon as the American people could render their judgment on those actions.

The independent voters who’d put him over the top in 2008 were horrified by the results. Exit polls showed a 24 percent swing among them, from 8 percentage points in favor of Obama and the Democrats in 2008 to 16 points against in 2010.

What may have been even more painful for Obama’s vanity was his discovery in 2011 that his rhetorical gifts had lost their oomph. He gave speech after speech on topics dear to his heart — and found, each time, that the talk was either ineffectual or actually convinced more people to oppose him.

His failure to move the needle on public opinion for his second round of stimulus last fall — remember “pass this bill now” and “we can’t wait,” after which the bill didn’t pass because evidently we could wait? — indicated he could no longer use the presidency’s “bully pulpit” to his advantage.

He doesn’t frighten Republicans in Congress, and he doesn’t seem able to convince the American people of much.

And yet, even in these circumstances, he has managed to get his way in a limited sense. Misguided Republicans didn’t get their way in their efforts against raising the debt ceiling in August, even after GOP toughness succeeded in preventing a tax hike. And the strange decision by the same Republicans to take a stand against extending the payroll-tax holiday in December met a similar fate last month.

In those cases, Obama’s position was the more rational, the more moderate, and it carried the day. Making recess appointments when the Senate isn’t in recess is neither rational nor moderate. It’s a raw misuse of executive power by a president whose love of government is his most vulnerable spot with the electorate.

Here's a sample of one of my favorite posts by Neil Munro in today's Daily Caller:

"Section 1066 of the law (that created the new Consumer Financial Protection Bureau) says many of the bureau’s new powers are to be held by the secretary of the Treasury 'until the Director of the Bureau is confirmed by the Senate'."

There you have it. Cordray was not confirmed by the Senate, therefore he has no authority. Sweet.

But Obama trumped that strategy earlier this week, declaring that the Senate wasn’t conducting business and was therefore in recess. The move outraged the GOP and its allies in the business and banking communities, who have threatened to continue the fight against Cordray’s appointment and to sue the bureau to stop his enforcement authority.

Bull. He acted outside the Constitution and I look forward to the lawsuits that will follow on any ruling the illegal appointees make. Barry is not Dictator of the United States. He's soon to be out of work, hopefully in jail.

It's hilarious to think that Bush's presses against the Constitution were more rooted in the Constitution than Obama's.

First of all, Bush won a lawsuit in order to be President! And the Supreme Court said it was a one-time decision to keep the US from going into chaos! And then we went into eight years of utter chaos!

So, Obama pressed the Constitution by doing something that is clearly a Presidential power -- recess appointments -- in order to put into place an honest man who can do the job well, by bipartisan agreement, whose job will be to protect us little guys... during a time that the Republicans were playing a game with the Constitution.

Your hero Bush got a lawyer to say that the United States government could torture people, and quickly tortured people before the case went through the Supreme Court.

The Supreme Court promptly told the Bush administration that it could not torture people.

President Obama is not one to let the Constitution get in the way of a "recess appointment." He just named Richard Cordray to direct the Consumer Financial Protection Bureau, and he has announced three similar recess appointments to the National Labor Relations Board. But Obama is making these appointments at a time when the Senate is actually in session, according to the Constitution and under all definitions accepted by authorities for the last century. If the Senate is in session, the Constitution requires the Senate's advice and consent to these appointments.

This attempt to circumvent the legislative branch is a violation of Obama's oath of office to uphold and defend the Constitution. Instead he is thumbing his nose at it and daring Congress, or anybody else, to stop him. It's the same sort of fundamental disrespect for the rule of law that is routinely practiced by tinhorn dictators like Hugo Chavez.

If Democrats care about preserving the Constitution, the danger of executive usurpation, and protecting the separation of powers among co-equal branches, they must stand up now and tell Obama to back off. If they stand meekly by and let him get by with it, Democrats will surely rue the day when they lose the White House, and this new, illegal power is wielded against them by a Republican president as willing as Obama to ignore the Constitution.

A president's recess appointment power exists under Article II, Section Two of our Constitution, and it requires the Senate to be in recess at least three days before the power is exercised. Nowhere does it say the president gets to decide when the Senate is in recess; only Congress can do that. It has never been understood any other way.

To justify this power grab, Obama contends that the Senate has actually been in recess for weeks because the Senate's brief pro forma sessions every three days are a sham since no official business is conducted. Obama might as well argue that his appointments are legal because the moon is made of green cheese. Article I, Section Five of the Constitution states, in part, that "Neither House, during the Session of Congress, shall, without the Consent of the other, adjourn for more than three days ..." The House has not consented to a Senate recess. Thus, the Senate's pro forma sessions are strictly constitutional, the Senate is legally in session, and Obama must seek its advice and consent on these appointments. Otherwise, they are null and void and will be thrown out by a federal court. Obama is counting on that not happening before November's election.

It makes zero difference where you stand on political parties, the CFPB, financial reform policy, the NLRB, the imperial presidency or congressional obstructionism. If Obama doesn't like getting the Senate's advice and consent to his nominees, he should take his case to the American people and ask them to amend the Constitution. What he can't do is make up his own rules to suit his re-election campaign strategy. Only Senate Democrats can credibly tell Obama to back away from this constitutional crisis. The nation is watching to see if they will

Your hero Bush got a lawyer to say that the United States government could torture people, and quickly tortured people before the case went through the Supreme Court.

The Supreme Court promptly told the Bush administration that it could not torture people.

But Obama said to the Supreme Court, "Yes, we can!" and proceeded to torture Bradley Manning. Oh, wait, maybe you don 't think 23 hours of solitary confinement and lengthy periods of enforced nudity are torture ...

Maybe that kind of thing is only torture when Bush does it. Of course, even Bush, as terrible as he was, didn't claim the executive privilege of murdering American citizens or drawing up a list of Americans to be assassinated. Even Bush didn't waste 16 year old American citizen boys with Predator strikes.

Puhleazzze don't try to compare Obama to Bush .... It's apples and more apples. The only difference between the Bush White House and the Obama White House is PR.